The Impact of AI on Jobs and Employment
Artificial Intelligence

The Impact of AI on Jobs and Employment

Mandi D 11 September 2023

Artificial intelligence (AI) is reshaping the workplace and transforming how humans work. As AI technologies like machine learning, natural language processing, and robotics continue to advance, there is intense debate about the implications for jobs and employment.

On one hand, many fear that AI will lead to widespread job losses and unemployment as machines automate human work. A frequently cited 2013 study by Oxford University researchers estimated that 47% of US jobs are at high risk of automation over the next decade or two.

However, others argue that AI will not necessarily destroy jobs but rather transform them. Just as innovations like electricity, computers, and the internet changed the nature of work without leading to mass unemployment, AI can automate certain tasks rather than whole jobs. New human roles may emerge to complement AI systems. There are also potential opportunities for new products, services, and markets to be created as a result of AI.

This article will examine the debate around AI’s impact on the future of jobs and employment. It will discuss concerns about job losses, as well as more optimistic perspectives. The article will also highlight key considerations for managing the transition and ensuring AI benefits workers. Potential policy responses to the AI employment disruption will also be explored.

AI Automation Could Lead to Widespread Unemployment

There are reasonable concerns that the spread of artificial intelligence could significantly displace human workers and lead to technological unemployment on a massive scale.

According to research and expert forecasts, AI and advanced robotics threaten to automate a huge proportion of existing jobs. A 2016 study by the World Economic Forum predicted that the rise of robots and algorithms could lead to a net loss of over 5 million jobs in 15 major economies by 2020. Similarly, a 2017 report by PricewaterhouseCoopers estimated that up to 38% of US jobs could potentially be at high risk of automation by the early 2030s.

The jobs most vulnerable to automation tend to be lower-skilled occupations that involve routine and repetitive tasks. These include positions in sectors like transportation, logistics, administration, retail, and food services. For example, automated trucks could put millions of truck drivers worldwide out of work. Cashiers and sales clerks are likely to be displaced by self-checkout systems and retail robots. AI-powered chatbots and virtual assistants may replace many call center and customer service roles.

However, even skilled white-collar jobs are not immune. AI algorithms are already outperforming doctors at diagnosing disease in medical imaging. Legal discovery work, financial analysis, report generation, and many other desk-based corporate jobs could be automated using current AI capabilities.

As technology continues to advance, few occupations will be entirely safe. One Oxford study estimated that AI could automate 47% of US employment, with the most vulnerable jobs including transportation, logistics, office support, production labor, sales, construction, food services, and entertainment roles.

With millions of jobs at risk, there are fears of widespread technological unemployment and social disruption. Job losses due to automation could deepen inequality and concentrate wealth in the hands of those who own technology and capital assets. There are concerns about how society would cope if AI radically disrupted employment across entire industries and communities.

Managing this transition could be a major policy challenge in coming decades. Without proactive strategies to adapt to AI automation and support displaced workers, the mass unemployment predicted by some could become a reality.

AI May Transform Jobs Rather Than Eliminate Them

However, the more optimistic perspective is that artificial intelligence will transform the nature of work rather than lead directly to widespread job losses. Just as previous waves of automation have changed tasks without replacing entire occupations, AI may automate certain activities rather than whole jobs.

Although they highlight the transformative impact that AI could have on employment, some researchers argue that predictions of mass unemployment are overstated. In a 2021 report, the Mckinsey Global Institute estimated that 15% of global work activities could be automated with already-demonstrated AI technologies. However, entire occupations are made up of multiple tasks, many of which involve skills that are challenging to automate such as social interaction, creativity, and complex reasoning.

According to this viewpoint, most jobs will change gradually as particular tasks are automated. For example, while chatbots may replace call center workers for simple customer queries, human employees will continue to handle more complex conversations. Financial analysts may spend less time processing data, but more time interpreting results and communicating insights. Automated trucks could handle long highway routes, but human drivers would still be needed for urban deliveries.

Rather than unemployment, the long-term outcome may be a fundamental restructuring of the labor market. Demand for uniquely human skills like creativity, empathy, collaboration, communication, and problem-solving could rise. Entirely new roles and industries related to designing, deploying, and maintaining AI systems are also likely to emerge. Education and training programs will need to evolve to prepare workers for these changing skills demands.

Just as past technological changes like industrialization and computerization did not lead to mass unemployment, AI innovation may be more likely to transform employment than eliminate it altogether. However, the transition could be highly disruptive in the short to medium term and will require significant adaptations from workers, employers, policymakers, and educational institutions.

Key Considerations for Managing the AI Employment Disruption

Whether AI automation ultimately leads to unemployment and social turmoil or transforms jobs more gradually, the coming employment disruption will need to be managed carefully to ensure positive outcomes for workers. Key considerations include:

  • Education and training – Major investments will be required to retrain workers whose jobs are affected by automation and prepare students and jobseekers to thrive in an AI economy. Governments, education providers and employers will need to collaborate closely on continual skills development.
  • Labor protections – Policies like unemployment support, retraining subsidies, and minimum guaranteed incomes may be necessary to support displaced workers. Labor laws and regulations may need to adapt to the changing nature of AI-enabled work arrangements.
  • Technology ethics and governance – Fairness, accountability, transparency and human control will need to be assured in AI systems that influence people’s careers and livelihoods.
  • Economic and industrial strategy – Governments must promote new industries and facilitate economic transition rather than trying to preserve old jobs. Planning ahead for how AI could reshape local labor markets will be critical.
  • Social supports – Societal safety nets and mental health services will need to be strengthened to help workers navigate difficult transitions induced by AI automation.
  • Corporate social responsibility – Businesses investing in AI must take responsible approaches to workforce planning, worker retraining, and community transition support where technology displaces jobs.

With thoughtful policies, new educational models, ethical technology development, and responsible management, societies can maximize the benefits of AI automation for workers while minimizing its potential downsides. The extent of job losses versus transformation will depend partly on how well social institutions adapt alongside technological capabilities.

Policy Ideas to Manage AI’s Labor Market Impact

Ideas proposed by researchers, government agencies, and other organizations for constructively shaping AI’s influence on jobs and employment include:

  • Universal basic income (UBI) – This oft-discussed proposal to provide all citizens with a guaranteed minimum income could cushion the impact of job losses due to AI automation. However, financing a UBI system remains a major challenge.
  • Voucher programs for retraining – Governments could issue vouchers workers can redeem to access training programs focused on skills needed in the AI economy. This facilitates retraining tailored to individuals’ needs.
  • Refundable tax credits – Topping up low incomes with refundable tax credits focused on workers in automatable jobs could support transitions and boost consumer demand.
  • New vocational programs – Major investments and partnerships are needed to create mid-career skills programs that blend vocational training, on-the-job learning, and classroom education.
  • Platform cooperatives – Worker-owned platforms and cooperatives could democratize the platform economy and ensure workers share in the gains of technologies like AI.
  • Labor regulation reforms – Updates to employment laws and regulations could support displaced workers and empower new worker collectives, guilds, and unions to represent workers in the changing economy.
  • AI talent visas – Fast-tracked visas could allow leading global AI researchers to easily work in countries focused on developing cutting-edge capabilities. This aims to foster beneficial AI innovation.
  • AI safety nets – Social protections like healthcare, housing, and food security that are not tied to specific employers will grow in importance in light of precarious AI-enabled gig work.
  • Local economic planning – Proactive local and regional planning to adapt to expected AI impacts could help communities navigate the transition in a way that protects workers.

This range of policy tools could help supplement incomes, facilitate retraining, empower workers, and plan economic transitions to mitigate risks and maximize opportunities from AI. Creative governance models will be needed to ensure technological progress benefits the many, not just the few.

Conclusion

In the coming decades, artificial intelligence promises to reshape the global economy and fundamentally transform employment. There are understandable fears that AI automation could lead to widespread job losses and technological unemployment on a massive scale. However, an alternative perspective is that AI will transform jobs more gradually by automating specific tasks rather than whole occupations.

The extent to which AI leads to net job creation or elimination remains uncertain. However, proactive adaptation strategies, ethical technological development, and responsible policymaking will be critical to ensuring beneficial outcomes for workers during this transition. With the right institutional responses, AI automation could usher in an era of safer jobs, increased productivity, and new opportunities to unleash human potential.

References

  • Oxford University – Oxford academics who authored studies on AI and automation risks including 2013 paper on probability of US job automatability. http://www.oxfordmartin.ox.ac.uk/
  • World Economic Forum – International organization that produces reports on economic trends including 2016 paper on AI and job losses. https://www.weforum.org/
  • PricewaterhouseCoopers (PwC) – Professional services firm that released 2017 report predicting automation’s impact on jobs. https://www.pwc.com
  • McKinsey Global Institute – Management consulting firm that publishes research on AI economics including 2021 paper on automation adoption. https://www.mckinsey.com/mgi
  • Universal Basic Income (UBI) – A policy proposal to provide all citizens with a guaranteed minimum income to cover basic needs. https://www.investopedia.com/terms/b/basic-income.asp
  • Platform Cooperatives – An organizational model where platform workers collectively own and govern platforms. https://platform.coop/